Is Costco Executive Membership Worth it? Is Any? I Run the Numbers.




Mrs. 20SF and I just got our first annual Costco “Executive” membership rebate check in the mail a few weeks ago, after upgrading to the Gold Star Executive membership from the standard membership, last fall.

We had been slowly increasing our annual Costco spend as we have shifted the majority of our grocery spend from other grocers over the years. We decided to give “Executive” a shot when the cashier stated that if we upgraded and don’t come out ahead versus the standard membership, Costco would refund the cost difference between the two membership levels.

Was the Costco Executive membership cost worth it? I’ll share my results, but you’re not here to see if the cost of upgraded membership is worth it to me, you’re here to see if it is worth it to you. So I’ll break down the numbers to help you make that calculation.

Step 1: Understand the Differences Between Costco’s Membership Levels

There are 2 Costco membership levels:

1. Costco Gold Star Membership (the standard membership level):

  • $60 membership fee per year
  • No cash back rewards

2. Costco Gold Star Executive Membership (the upgraded membership level):

  • $120 membership fee per year
  • 2% cash back rewards, up to $1,000 back per year (note that some items, i.e. alcohol in some states, are not eligible for the reward)
  • “Extra benefits” – includes discounts on insurance, etc.

There are also business versions of these two, but they are the same cost and the only difference from the non-business versions above is the ability to add more people to the account.

Step 2: Disregard the Costco Credit Card Rewards

costco membership feeIgnore the cash reward benefits of the Costco Anywhere Visa Card by Citi. The card has a number of nice perks to it that make it a keeper, such as 4% cash back on gas, 3% on restaurants and travel, 2% back on all purchases at Costco and Costco.com, and 1% back on all other purchases. But, those rewards are irrelevant in the Gold Star Executive versus Gold Star calculation. Every Costco member gets the same cash back rewards if they have the Costco Visa – at Costco and elsewhere – regardless of their membership status.




Step 3: To Determine if Executive Membership is Worth the Cost, Compare the Upgrade Cost to the Cash Back Benefit

Here is how the math calculations work out when comparing the Executive Gold Star ($120 fee) to Gold Star ($60 fee) membership levels:

Monthly Purchases:Annual Purchases:Gold Star Annual Reward:Gold Star Executive Annual RewardExecutive "Benefit" (Reward - Cost):
$125$1,500$0$30-$30
$250$3,000$0$60$0 (break even)
$500$6,000$0$120$60
$1,000$12,000$0$240$180
$4,167$50,000$0$1,000 (max)$940

You can see that the current break-even is at $3,000 in spend over your membership year.

  • Any spend below that, and your Executive membership upgrade fee was not worth the cost (and you should ask for a refund).
  • Any spend above that, and you came out ahead versus your Executive membership upgrade fee, making the added $60 expense worth it.

In my first year, I received a check for $60.58 – so I literally came out $0.58 ahead with the upgrade. I also did not use any of the “extra” benefits, so I personally do not place a value on those (your mileage may vary there).

Is Costco Membership Worth it?

Putting membership levels aside, it’s worth asking the question: “Is Costco membership worth the cost?”.

And I’m not talking about the Executive membership here – I’m talking about ANY Costco membership.

This is one of those questions where the answer is going to be dependent on the purchasing habits of each individual consumer. I can tell you from my personal experience, that the savings in gasoline, dog food, toilet paper, and Costco’s Kirkland alcohol offerings alone are easily in the hundreds of dollars per year versus other retailers.

There are some other nice benefits to Costco membership as well. The Costco appliance warranty (I was able to get a 4-year warranty on a dishwasher for no additional charge), as well as extended warranties on electronics and other goods, is as good as any retailer out there. And I’ve never had a challenge returning an item that I was not happy with.

If you’re not familiar with Costco’s offerings and item pricing, or even if you are, here are the steps I would recommend, to help you determine if a Costco membership is worth the cost for you:

  1. Research the cost on staple items you regularly purchase, on a per volume (not per unit) basis, versus comparable items at alternative stores (Costco often has larger volume units, so per unit is a necessity).
  2. Using a grocery cost spreadsheet and knowledge of your usage habits, calculate the potential savings per year.
  3. If savings are greater than the standard membership fee (currently $60), then the membership fee is worth it.

You can use a similar strategy to, for example, do a Costco versus Sam’s Club comparison. If you’re not sure what Costco has to offer, there are many ways to shop at Costco without a membership, in order to aid your research.

And if all else fails, you can purchase a membership and give it a shot. There is no risk of loss, as the Costco membership refund policy states:

“We will cancel and refund your membership fee in full at any time if you are dissatisfied.”

Costco Membership Cost & Value Discussion:

  • Is the standard Costco membership worth the cost to you? Why or why not?
  • Is the Costco Executive membership upgrade worth the cost to you? Why or why not?

Related Posts:

6 Comments

  1. Deke
      • Deke
  2. michael
  3. Bill Voshell

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